Welcome to the supporters fun ask an investor I’m your host Jeffery Potvin and let’s please welcome Sanjeev Kohli founding partner of glowfish Ventures as our investor for today welcome Sanjeev it’s a real pleasure having you join us today.
Sanjeev: Thank you JP be excited to be here
Jeffery: Well there’s a couple of things that I’m excited to dive in mostly about your background because I think it’s really exciting when you have a background like McKinsey background because not everybody gets the opportunity to spend as much time as they have you have in a career that’s in working in such fast-paced Tech m a sales such an amazing background and I know you and I have chatted about this in the past and you got to work on some pretty amazing and cool projects so we’re going to dive into that but I guess the way we like to start the show is if you can give us kind of a deep dive background from the schooling all the way through all the great things that you’ve done and including obviously the The Venture that you’ve been working on for the better part of the last six years if you can share a bit about that and then one thing about you that nobody would know now.
Sanjeev: That’s a lot to ask all right let’s let’s go down the memory lane a bit um so I am Indian as as you already mentioned grew up in Delhi um went to uh one of the engineering schools in India also in Delhi it’s called IIT Delhi spent uh four years of my line learning you know my life learning about electrical engineering and computer science uh then I did a little bit of uh research um and uh you know quite an interesting uh sort of detour from a typical career uh I ended up working in future Technologies division of British Telecom where um we did you know amongst many amazing things we were the first ones to do tele handshake uh so we were you know we were the folks who uh sort of probably transmitted the sense of touch over internet for the first time um ever and this was about 20 year old years ago uh so yeah that’s one of the things that not many people know about me I’m answering that already because I want to go in a chronological order uh post that went to Berkeley uh continued my engineering career realized I was probably not the best engineer uh you know amongst the skill sets that I thought I had engineering wasn’t wasn’t at the top of it so uh left engineering joined the business World went to McKinsey spent about uh 13 years had an amazing career uh worked all over the world yeah from North America and Europe Middle East Asia Etc and for the last seven years I’ve been building Tech Ventures out here in the Middle East.
Jeffery: Amazing and I guess to take a step back to when you’re working on the McKinsey side um you obviously got to work with a lot of big Tech but I think kind of where the interest for me is to explore what it’s like to be working inside of a business like this because I I’m going to say that it seems exciting for someone who’s never been in there I have friends that have worked inside of these obviously these big massive consulting firms can you share a little bit about what it’s like like what is the environment you’re getting pulled into massive businesses to solve problems and it’s not just one person going in to fix it there can be 100 to 2 000 people going in just to re-haul a business can you kind of share a little bit about what that experience details and and why that brings so much value to your background.
Sanjeev: Sure um no I think you already summed up uh some of the some of the you know insights I would say one would draw after spending time in there right um there are times when you do need you know an army of 100 to 200 to 300 people to actually just turn around a business in Mammoth business and McKinsey like many other big consulting firms work with a lot of top Fortune 500 type companies you know big corporations and it’s not it’s not easy for you know three to five to ten people to actually change the direction of course uh of some of these businesses so you do need at times literally an army to actually drive change not you know just in the strategy but in terms of how do you basically align the entire organization to drive the strategy forward and and uh and uh you know uh move in a particular way sometimes across not just cities but countries and sometimes across continents as well so uh yeah um you know if I were to describe what it is like uh to work at McKinsey uh or one of the top consulting firms I would say at least and this is true for the the first few years it’s a bit like drinking water from the fire hose I know it sounds a little bit cliche but that’s probably the best analogy you are learning so much you are absorbing so much you are overwhelmed with responsibility and of course you know uh uh the the implications of some of uh some of your actions are quite significant uh so you know at least in the first few years it can be quite overwhelming you know just to be candid and you know I I literally felt like I was a hiring mistake later on I realized many people felt that way so that was a bit reassuring and uh somehow I survived for over a decade uh but the learning never stopped you know it probably did not feel as overwhelming as it felt in the first few years kind of it is also you know you get used to the expectation so uh build a bit the muscle to to deal with that level of stress and deal with that level of uh uh you know High intense uh you know pace of work uh but the learning never truly never stops so very grateful for my background at McKinsey uh you know learned a great deal about how institutions work how people work you know how businesses actually create value and uh you know equally importantly learned a whole bunch of things that one shouldn’t do you know to uh to preserve value to make sure that you don’t end up destroying values just trying to basically Port some of those learnings over uh and make sure we do things right uh in our own Ventures.
Jeffery: It’s interesting when you mentioned preserved values so when you’re going into these businesses are they coming to you with a problem that they need to solve are they coming with stagnation and they need something to generate Revenue are they coming with um legal issues that have come up that they need to Pivot the business because uh they’re in patent infringements what are some of the kind of typical areas that you saw that were being faced that you then had to come in and solve like obviously there’s a lot of work that you can put in it sounds like it’s continuous work and you’re always grinding out probably new models and new theories and driving that strategy forward but what were kind of the major impetus of what that shift needed to happen inside the business and why.
Sanjeev: Uh so you know it’s it’s it’s it’s a loaded question uh unfortunately cannot give a simple answer to that you know uh often uh you know if you look at practitioners at McKinsey they would over period Drive develop some sort of specialization or some sort of focus uh area uh and that could be functional that would be in you know uh industry specific um but if you were to say okay like take like take a step back you know what kind of problems do these corporations would face uh when when you’re working with them as a consultant you know it’s the whole Spectrum so some of them are struggling on the growth side some of them are struggling with uh you know uh on the cost side of it some of them are struggling because their business models are getting disrupted by you know super agile super Nimble super fast attackers you know who are eating away their lunch um sometimes it’s just organization problems you know uh people people are just not you know they realize the companies are not organized properly and and sometimes there’s just lack of alignment of incentives so if you were to look at the problems you know uh you would find a full spectrum again different companies go through different phases it’s it’s very industry slash pace of the company specific but uh you know I did get quite a bit of exposure but as I said earlier while answering this question over a period of time you tend to develop a specialization or build sort of your own Niche when you work for this long in in some of these environments uh so for me what that meant was working in uh you know with companies and building new things so how do you bring in the DNA of you know a startup or entrepreneurial Spirit into a large you know multi-billion dollar organization to build something so over the past you know uh or not past over the last four or five years of my career with McKinsey I ended up you know building a lot of uh new businesses inside these large corporations and sort of you know that’s that’s that’s uh I think also helped me appreciate what it takes to build some of these businesses and uh and that’s what you know I’ve taken into my new life as well uh but yeah you know the the problems that are faced by corporations on a daily basis uh are quite significant and there’s a whole spectrum of it um I just love the go outside of it.
Jeffery: I love it and when this is all going on are you pitching them so you’re they’re coming to you and saying hey I wonder where our clients is um ADT I don’t even know why that came up but and your goal then is to say well let’s get in there look at some data and come back and build a business or build a solution or re-engineer something or are they actually well on the ball saying we’ve got these three problems you’re in here to help us fix them let’s get to this and let’s solve this.
Sanjeev: It’s both quite frankly right um at the end of the day if you are going to work with a corporation uh in a meaningful way you will probably not be able to do so as a transaction so it and you know these things tend to have a life of their own these relationships last for you know um over multiple years with not just institutions but individuals within those institutions so you are in constant touch with the with the c-suite and you’re having a bunch of interactions with them across you know multiple topics um and you know you you want to stay relevant and you want to make sure your clients stay relevant right you know as a consultant working for a client you also take a lot of pride in your client success so you are proactively thinking you know quite often about what could they do that could differentiate them in the market you know uh so what that meant for me was what new businesses could they build yeah what kind of new interesting levels could be able to drive growth so yeah often we would think about in our team as a think tank you know what are those cool five things that you know we could bring to our clients and you know the c-suite uh you know in a similar manner you know it’s it’s Bally their day off right they are thinking about it as well so often they would basically ask how about this how about that you know do you think we should do that or we could do that or what would it take to do that so it would be an ongoing dialogue that you know as I said uh it spans over multiple years and it’s a relationship and at any point you know you find that aha moment saying this does make sense at this particular time so yeah let’s go for it.
Jeffery: I like that you added in that it’s a relationship so you’re building on that and I think the other side that really kind of intrigues this storyline is that when you are working with these businesses um it’s not that they’re not thinking about these things they are re-engineering their models in a Fortune 500 company they’re always rebuilding they’re always focused on growth and bottom line growth and bottom line and then having you guys kind of in their pocket to be able to come in if there’s a regulation issue or something you’re coming in to solve that problem and be able to move the business forward in the right direction so they’re looking for that expertise is that kind of a fair analysis of of how a fortune company Fortune 500 company would be operating they’re a public company they’ve got money they want to maintain where they are in the space they don’t want to lose out so they’re always on the ball they’re always engaging and figuring out can I build a new business can I work with a startup what can we do is that kind of the idea that fits across the the planes when you’re working with them.
Sanjeev: It does actually that it quite accurately reflects the reality um you know any consultant or consulting firm that thinks they know more than their clients business they are you know probably uh you know not not not not living in the real world um so and and I have seen my fair share of Consultants across different kinds of firms you know including Kinsey itself there are times you do believe that you know more and you know life is a very humbling experience um the c-suite that is living and breathing and and and dealing with problems on a daily basis you know uh I would say they are always probably um a few steps ahead of you in terms of information they understand their business better than you do you know as an outsider you don’t where you do help as a consultant is you do bring a fresh perspective you know there’s a beautiful question called why and there’s a beautiful question called why not you know it’s it’s tough at times when you are in when you are in the middle of operations on a day-to-day basis dealing with 20 you know types of issues that would be super detailed uh or that would be super existential right you as a as a senior executive especially a CEO you have to straddle across a pretty wide spectrum of issues um so I think the value that a consultant or a good counselor could bring to the table is to help you know pull these folks out a little bit from their day-to-day you know set of operating issues and help them think a little bit more clearly perhaps and provide the right amount of impetus or fact-based uh where they may need some something to cause you know especially around the market you know things that are outside of their organization uh to help them develop a bit more clarity um I think that’s probably the best role one could play when you’re working with a fortunate companies you know you will not find these Executives Who would know not you know have Amazing Ideas it’s just that at times you know they’re just too busy and they have a day job as a consultant what you do is your day job but that’s not the day job of your client so I think a good consultant is able to harness the ideas of the clients bring some fresh perspectives especially in an outside in Manner and help them make something better it’s very rare and I have personally not seen where you know third party from outside is completely you know brought uh a bunch of new ideas to drive growth in a company and the company had zero clue about it that does not happen it may happen in a movie but it doesn’t happen.
Jeffery: I like this so when and I like the fact that he’s saying that you’re making it better so now it sounds like you’re kind of almost like a lawyer you’re building a case study to help them see an outside perspective you’re using as much data as you can to kind of prove this case study to give them kind of an outside view into what they could look at doing or not and then they’re taking some of that and they’re and they’re cutting little pieces out and saying Yep this is going to work great idea this fits nope this won’t work so they’re kind of figuring out how they can adjust their engine because there’s a lot of people inside this organization and how they can shift to it what are the influencers that you kind of think you bring um coming into this business with the information with the data what are those informational uh triggers like what are you having to pull in order to be successful in the role that you had.
Sanjeev: Well I think you have to almost try to think about stuff uh you know from from a 10 000 foot level you always have to start there and say uh you know where is this industry going where is this company going is there a potential you know opportunity or set of opportunities that lie ahead of uh this company given the context of the evolving industry uh that one could you know participate in and that is a role that a third party is almost by definition better suited to do because they are not vested in the current assets they are not vested in the current processes also they’re not vested in the current set of people so you know as a shareholder we get a lot of value in a neutral third party looks at it um and it’s interesting funny interesting you you do analogy with lawyers um you know one of my mentors at The Forum sorry we still call it the firm um used to always you know equate us with lawyers because lawyers tend to be Partnerships lawyers are not publicly listed institutions because they don’t have shareholders their partners and partners have clients and I do think fundamentally as a consultant as an advisor that model is a superior model and uh why is that Superior is because it allows you to make certain trade-offs it allows you to make certain choices that you would not be able to make if you were a corporation and you were answerable to your shareholders whose objective was to maximize profitability so it’s funny that you touched upon the law firm perspective here it’s a good consulting firm I think has to operate and take a similar level of uh responsibility like typical Law Firm Partners would take.
Jeffery: I love it and now this kind of shapes up to taking a startup and the model and what’s going on here how often are these Fortune 500 companies investigating early Tech are they investigating it as more of just a hearsay something to know about and taking McKinsey are they looking at this saying hey here’s some stuff that’s happening in the market we’re projecting in 10 years you need to be here in order to keep growing at 20 a year Etc and here’s some of the tech that may do this so we want to keep this on the radar so is there an engagement that’s happening or are they just so many leagues ahead that they don’t really have the time to pay attention to these uh smaller you know pre-seed seeds series a companies and they’re working too hard to get into a business when they should be coming there at a series A or a series B when they’re doing 10 20 million instead of you know a lot of focus where startups tend to say hey I’m working with this big company and you’re trying to tell them wait a sec guys you know maybe put the brakes on and work on some smaller mid-size companies and get your proof points in because these big players don’t really have the time they’re trying to make sure that they’re growing every year and this might not be the vehicle for them so they may kick tires with you but they really don’t have the expertise or the knowledge to be able to dive into something so um uh early if you will in the business Market.
Sanjeev: Um again you know it’s a it’s it’s a very interesting question um there is um you know the the sound right answer and there is the reality you know um one would like to believe that they are looking at all potential new startups new Innovations new technologies that could disrupt them but then there is a reality of delivering the quarter over quarter performance so I think the answer is somewhere in the middle uh depending on how big the corporation or the company is depending on the nature of their business are they in a heavily regulated industry or CS you know in a super comp High competitive low barrier to entry industry I think the focus of executives uh would be more or less on some of these innovations that are happening within their sector if if if I would compare Executives from industries that are heavily regulated uh licensing Etc tend to be a barrier to entry in these industries right they probably are not going to look after super early stage Tech Innovations with the same level of keenness that for example retailer was right because there’s a heavily competitive no regulation you know low barriers to entry kind of a market uh so you know those kind the first set of folks would probably look at um companies that do pass the series BC stage because for them you know there is uh the more certainty in the business model that they can feel comfortable about before they can choose to you know Place big bets on these kind of uh Innovations now again I’m overly generalizing life is never this black or white so you know uh do some of the heavily regulated industry players end up buying super early stage companies that are a lot of Promise yes but their acquisition in general overall would probably skew towards a little bit more mature companies uh because their business model doesn’t move that quickly that is not as Nimble on the other end of the spectrum as I said you know take high-end retailer or you know uh sort of not high-end retailers uh just you know retailers overall they will probably uh look at and scan you know what else is out there that could help them you know get that extra two percentage Point margin in in their overall ecosystem because uh you know for them these things could be existential if they missed the vote so the level of uh level of uh uh scrutiny I think depends on the company’s situation in the industry situation but yeah I I’ve seen you know people get very excited about super small companies and I’ve seen people not getting excited about recently large size companies as well so you know it’s a it’s a very interesting set of situations that you deal.
Jeffery: Well it’s good to know because um as you’ve shared this journey and what you’ve gone through it puts it in perspective for a startup that is pitching or trying to get into these big conglomerates um how long it takes for something to cycle through and where the value comes from and you did mention of course preserving value and growth and these businesses have it takes a long time to shift and move a business and if they’re sending hundreds of consultants in to make that pivot and shift so that they can bump themselves up you know 10 percent over the next three years you know that things are going to take a long time to shift and approve and go through so I think the mindset is is that you know there are possibilities there’s one-offs but really let’s be focused on come with some real Heavy Hitters go in and get some earlier stage uh clients and customers that can take you on before starting to play with the big players because that could just take a lot longer and and don’t want to waste that time and I think you kind of shared that there’s one-offs of course nothing’s that um always the black and white but I think at the end of the day there’s a way to look at your approach to a market and then when you were talking about building companies within the company which I think is pretty exciting you’re maybe exploring some of that earlier Tech so you kind of probably will be out there on the marketing side but maybe you can share a little bit about this because my experience when I was working at one of the largest retailers in Canada at the time I was running all of these Innovation projects and I think for every 10 cool Innovation projects I had one made it through the to get into the next stage which is approval and start getting pushed out in the business and that took years so there there is um you know I wouldn’t say it’s fast but they really hand pick the ones that are going to generate save money or make a lot of money so maybe share a little bit about what that duration takes because again this puts it into context for people that are working in this space you know it could take 10 years for something to really flourish how does that really look when you’re starting to dive into to a big shift in a business.
Sanjeev: Well you know I cannot say that I have not seen what you just described before I can say that I’ve seen that to be the norm than the exception so it is very real you know very difficult to actually come out with breakthrough innovation in a corporate environment um and uh you know the companies that are able to do that better than the others tend to be the ones that understand the alignment of incentives at individual level better what do I mean by that um to the take the example of a startup right uh a startup that goes on to create you know let’s use jargon uh and and some of the buzzwords you know becomes a unicorn ends up creating billions in dollars in value uh is very you know I would be very surprised that it is not the result of Blood Sweat and Tears so the founders really have to grind they really have to work with limited means resources early in their early days hustle you know constantly try to raise funds meet a whole bunch of you know stakeholders to try and figure out how can they you know de-bottle like some of the issues they’re facing so on so forth and all that result of Blood Sweat and Tears over you know the ears for some of these Founders results in tons and tons of value creation which they share with the other you know investors that have come along in their Journey you know uh over the years um but when that happens these Founders tend to also strike gold so there is a clear alignment of incentives in these startups which is you know if the company ends up you know finding the product Market fit if it ends up being able to you know scale up in a in a fast uh manner uh go ahead of the competition then there will be a scenario where everybody who has been part of this journey will be incredibly well off financially if you know by no other metric right uh corporations typically struggle to create that alignment of incentives in my personal opinion again you know I am broadly generalizing here and probably uh you know exaggerating a bit here I think this is you know the companies that understand that they need to align the incentives of people who are driving this new innovation almost in a similar manner as founders of startups tend to do much better with corporate Innovation than the ones where you have salaried employees who may potentially get a discretionary bonus at end of the year because you know the alignment of incentives is just not there and you know you would find actually very good interesting brilliant ideas die on the on the table because the idea is great it’ll make ton of sense for the company but there is no good individual in there for whom it’s worth burning a Midnight Oil how do you create that alignment of incentives within the corporation and I focus a lot on that uh you know so firsthand some of the examples that were great and some of the examples that didn’t go so well right so introspected quite a bit um and again in hindsight it’s it’s very simple right uh if there is somebody who is going to be incentivized to make a 50 million dollar business within a multi-billion dollar organization uh which actually creates quite a bit of value even though the revenue Wise It’s a fraction of the overall business but value-wise it creation of value shareholders and this individual also will do very well then the likelihood of that individual or set of individuals you know working to achieve that common objective is much higher.
Jeffery: Well said um I love it so I I guess the best way to to shape this is that um I guess the takeaway is that as a Founder is building a company and working their way into a large corporation there’s probably a point where it makes more sense to start to align to their strategy figuring out what their strategy is and start to bake in your business model into that and that’s probably at a later series a stage um you’re vetting it beforehand but you’re trying to work your way into where their strategy fits if you’re looking for an acquisition starting too early may actually cause probably uh too much knowledge sharing and have that business maybe take some of that information and start to build it into their own business because they’ve got that time to waste and they’ve got people that are doing the nine to five as you kind of alluded to and that they don’t have real heavy incentives to go fast but they’ve got incentives to kind of build it out and be strategic enough so that in the future it will be something bigger so it kind of aligns that if they’re going to do something you might wait when you’ve got all your guns going and blazing than it is to go in too early when you’re at your weakest point and not have the ability to sell through in a proper fashion.
Sanjeev: Absolutely you know there’s an old saying don’t bring a knife to a gunfight so you know that’s a good point if if if the opponent is not as agile and Nimble but they do have the Bazooka uh which in in the current analogy means you know uh lots of lots of uh uh you know funding um then the odds are not uh in your favor so yeah in a scenario like that I would probably go a bit later then go a bit early general rule here right but you have to weigh the situation you know where you kind of stand but you know if if you can stretch your existing funding and dollars to push you know your product uh market for just that little bit further to scale just a little bit further it’s always beneficial.
Jeffery: I love it well you shared some great insights um the relationships preserve value uh why or why not some clarity make it better I think there’s a lot of great things you shared there maybe we can just now kind of dive in quickly and touch base on um kind of I guess maybe the last five six years as being uh the founding partner at glowfish ventures maybe you could share a little bit about where the background and the philosophy and how you guys are driving the business forward and how you’re helping early stage companies today.
Sanjeev: Sure um so now GloFish Ventures came about um over a period of two years I would say we didn’t one finder wake up and said okay you know this is what we’re gonna do um in reality you know just like in life you know this the the punchline is always more interesting but there is always a journey behind it uh in our case the journey was uh through the lens of one of the startups we we invested in some of us uh uh as me and my partners um um you know uh while I was still at McKinsey and they were still at McKinsey um and we saw that startup go through various stages of struggle in its uh in its existence and uh in in you know figuring out how do you build the product and figuring out how do you find the product Market where you’re figuring out how do you scale figuring out what not to do on the you know on the operation side of it so on so forth um and when we saw the journey from up close you know there were a couple of aha moments for us right the first one was you know it you know we realized that a whole bunch of these problems that we’re seeing um they are pretty basic and we can also see a lot of other startups facing those problems um so we said well you know then clearly there’s a role for institutionalizing some of this learning um and secondly you know we realized that um often at least in the Middle East that point there weren’t a lot of you know I would call what I would call founding teams now the concept is pretty well understood amongst Founders as well and they typically you know go uh you know build businesses in a pack but uh they typically would be solo Founders best case two of the folks uh but there was wasn’t a rounded sort of set of skills across the spectrum of the business the operations the digital you know marketing product building Etc side of it so we said okay there is clearly a role that we could potentially play as an institution and that’s when we came about and we set ourselves to be a venture building fund uh with domicile in Cayman Islands um and uh you know we get involved pretty much from I would say pre-seed to seed uh very rarely at the series a level because we love to act as an Institutional co-founder with the founders and solve exactly the problems that I just talked about right which are a compliment the founders on the skill set they typically lack um you know on the tech and marketing side of it and be make sure the institutional learnings that we have had on you know what not to do um we sort of you know the company sort of stick and adhere to those things so that they get a lot of things first time right um and we’ve been incredibly incredibly lucky that we have had many more learning since then because we built you know probably 10 Ventures uh since that date and uh uh you know the second venture did much better than the first one yeah and you know when I say much better if you were to use the kpi or or metric of time to series a funding right uh if we use that as a metric then yeah the second one got their 30 40 faster than the first one the third one got there another 30 40 faster uh the latest one was there in nine months so yeah I mean we’ve clearly seen the value of uh of of uh sort of institutionalizing this process of building businesses.
Jeffery: I love it and 10 of them already so that is huge uh and the reason why I like that
Sanjeev: Sorry not all of them are around you know we do we do take a lot of bets on new business models as well right and uh we we we have a pretty uh a rigid sort of uh focus on making sure we don’t throw good money after bad money so we take decisions about uh you know cutting our losses in terms of shutting down some of the businesses where we are not excited anymore because new facts are presented themselves either in terms of the market reality has set in order something else uh has made us uh uh you know feel less excited about them so yeah we have about five left um so about I would say 50 is is okay rate we’re quite happy with that and if it continues uh I think life will be great.
Jeffery: No that’s great and what I love about the way you guys have done this uh obviously the whole piece of it’s good um by building all these Ventures and then carrying them through but what you just shared with is that again this goes back to a Founder understanding and mentality is that as you’re building something if you can’t see the scalability you can’t see the opportunities and you can’t see the growth after one two three years there is a point where you can shut this down and build something different you can walk away from that I think there’s this fear of failure of walking away from something that you can’t see the light or you can’t see that five-year a ten year plan and I think that’s something that Founders really need to take inside and have more investors more VCS more people like yourself sharing that and saying hey we had 10 now we got five that’s allowed like you you can take a step back if it’s not going to go in the direction you want um and then the other side of it was that you shared taking these companies and taking a company that was say not so good the first one and then you were able to scale the second one three months faster and then the next one three months faster than that one and the reason why that resonates with me it kind of Clicks in my head it’s like your first find your second fund your third fund you’re always going to get sharper better quicker at making choices making decisions building something forward I know when I did a um I convert single dwelling homes into duplexes my first home took a year and a half the second home took me uh a year the third hold took me nine months and you’re like well how’s that happening because you keep figuring out ways to be way more effective and efficient so it’s the same thing a Founder is going to do they have to start to look at that and say you know what I’m in year two I’m in year three it’s my first business maybe I’m not going to get the scaling maybe it’s not worth raising maybe I just break it apart and and I think those are hard hard questions to ask or hard discussions to have with investors but I think it makes sense and you’re kind of topping that by saying yeah you do need to look at this it is a smart way of running business no.
Sanjeev: Absolutely absolutely um and uh you know you’ll be surprised how many investors actually understand that and are supportive of the founders um again I’m generalizing uh I’m sure situations where investors are super unhappy when the founders decide to basically you know turn off the lights and says put the shutters down this is not going to go anywhere um but you know if if you have investors on your cap table that have seen some of uh you know these Cycles uh then you’ll be very surprised how often uh you know your own existing investors might open doors for you uh if they believe you know that you have the right capability you have the right mindset and you have the perseverance and you know they would they would uh often uh you know not want to let go of you to be honest uh a fail founder is worth his weight in gold as we say because they have you know a very different much more enhanced empathy for Capital and uh that that’s that’s that’s not easy to develop so once you’ve struggled you have very very different sort of approach towards building your second business and when we’ve seen that you know firsthand um and quite frankly uh that that’s just like getting you know a degree uh if not if not uh you know more relevant um I would argue it’s actually far more relevant but you know it’s literally like going to gym and building is you know a different muscle right and and and in the business instead of building businesses that muscle is super valuable um so we we value failed Founders a lot you know you learn a lot of things and I personally learn on a daily basis when I interact with them.
Jeffery: I love it well shared well we’re going to transition now into our case study um maybe you can share a little bit about a Founder he or she what they’ve done to kind of overcome the barriers to be successful or to Pivot change or even fail something that really shows what it takes to be an entrepreneur.
Sanjeev: Yeah I think um maybe maybe the first founder we had um you know who essentially I should give a lot of credit for helping us embark on our own Journey uh is a great example you know she’s a phenomenal woman um you know uh she started this business uh in 2000 so it’s not 20 15-ish time frame um it started as a Marketplace that will help you find you know a particular service provider I’m of course not gonna go into the specifics of it because I don’t have the Liberty to share names and details but but uh you know I’ll try to provide as much color into the character uh as possible so she started with building the business in a particular industry uh as a Marketplace help you know customers meet uh meet the suppliers or providers and within that industry and that industry is very opaque so it’s very hard to find good quality suppliers word of mouth but you don’t know you know what you’re going to get when you when you try to you know um hire one of these uh so she’s set out to solve their problem and create transparency into incredibly opaque industry and help customers have consistently better experiences that was the vision down you know on day one uh when she started uh great vision made ton of sense just not commercially viable because that industry is still you know Niche the market is just small and uh you know if you operate as a Marketplace then your margins are even smaller so um you know did customers get ton of tons of value uh out of that business in the first couple of years yes did suppliers get tons of value out of that business yes because you know they got a lot of interesting customer orders and it allowed really the good suppliers to in an objective manner tell the market that we are better look you know this third party has our ratings uh consistently at five star or 4.9 star versus some of the rest it allowed them to actually even charge you know a premium on their service uh delivery um so you know the as a business the business created tons of value for customers as well as supplier to the business itself did not make you know uh as much did not get as much traction as we would have hoped for uh because you know the realization that the market is not as big as we thought it did set in uh but you know at that point uh as a Founder it’s a pretty tough message you wake up and find in you realize you know that the funding Taps are drying and there is actually a problem in front of you which is not really in your hands to solve you know you wasted a couple of years of your life what do you do now um I’m not focusing on the smaller problems but this is you know one of the existential problems that happened uh and and she faced in a couple of years and you know uh like any entrepreneur she didn’t let it you know uh she did she didn’t let it put her in down you know mentally instead she set out to say okay how do I now Leverage What I’ve got and find bigger markets so she pivoted you know from one uh Service uh business she ended up creating a business that now allows customers to book 60 70 different kinds of services they are not identical the business models are very different but she’s found a way to constantly integrate new services you know even though the processes are quite different across different services but she has found a way by leveraging Tech and operations to create a business that now is able to you know take that fixed cost of the of the HQ and the tech Investments and is allowed to actually allows it to actually get amortized over a large number of transactions across different service lines so phenomenal phenomenal pivot she also realized that you know she was not building the organization in a particular way to cater uh to uh to to the demands of her moving business so she then rationalize some of the uh some of the uh you know FTS on a particular side of the business and repurpose a lot more on a different kind of a business you realize that okay I am going to be a very different kind of company yes I’ll still have the Tech Source on top of it but I am not truly a tech company that scales on its own I am an Ops company so she completely changed the organization focused the kind of people she hired um and then yeah you know fast forward um eight years later you know she’s sold that business uh for like zit uh she’s doing very well we’re very happy uh for her and uh you know we have learned a lot of stuff along the way because of her perseverance so if I were to look at the candidate I would say you know this is a candidate that had a vision skills and the perseverance and the Curiosity to question whether her vision was right and even new facts presented themselves she was able to actually do justice to them.
Jeffery: I love that Curiosity it sounds like she had the grit too to just keep tackling the problems and pivoting and making sure she hit market demand and needs so that’s pretty amazing uh
Sanjeev: I wouldn’t I wouldn’t be able to deal with half of those problems and I’m being you know quite generous to myself so uh yeah phenomenal character so that’s why you know it’s not everyone’s cup of tea and it shouldn’t be everyone’s cup of tea either by the way entrepreneurship is hard it’s full of ups and downs it’s it’s you know no entrepreneur will tell you that oh it was super easy they left their you know nice corporate job that was uh you know taking care of all the expenses and through themselves at the deep end without any you know uh certainty of a fixed income stream and then life was super easy and bed of roses and now they are multi-millionaires because they’ve done so well if somebody tells you that the odds are there probably you know not sharing the reality right so it is tough it is hard it’s not for everybody um and uh you know I think a lot of people uh should also understand what are they getting into before they get into it so I’ve seen entrepreneurs not realizing how tough things can get you know and and then it comes as an after effect uh but hey you know in some cases those you know uh uh those entrepreneurs are the two entrepreneurs who basically lift themselves up when the chips are down and uh and make something out of nothing.
Jeffery: I love it it’s true and uh well shared well we’re gonna transition now into the rapid fire questions uh so the way this works is you’re going to pick one or the other coming in obviously as the investor and I will start with business and then we’ll jump into personal all right let’s do this founder or co-founder
Jeffery: Unicorn or a four-year 10x exit
Sanjeev: 4 years 10x exit I’m a low risk appetite guy I guess
Jeffery: No no it’s perfect pure Venture tech or cpg
Jeffery: Nft or web 3.0
Sanjeev: Web 3.0
Jeffery: AI or blockchain
Jeffery: First time founder or second third time founder
Sanjeev: Second third time founder any day
Jeffery: First money in or series A
Sanjeev: First money in
Jeffery: Angel or VC
Jeffery: Uh board Seat or Observer
Sanjeev: Doesn’t matter either of those is fine depends on the situation
Jeffery: Okay safe or convertible note
Sanjeev: Safe is fine
Jeffery: Uh lead or follow
Sanjeev: Lead given our first money in principle
Jeffery: Equity or interest payments
Jeffery: Uh favorite part of investing
Sanjeev: Meeting incredible individuals learning about a lot of cool things that are happening
Jeffery: Number of companies invested per year
Sanjeev: Three to four
Jeffery: Awesome any preferred terms
Sanjeev: Um the ability to guide the company’s Direction so uh you know that typically manifests itself in terms of board rights Etc
Jeffery: Okay uh vertical is a focus
Sanjeev: Uh Healthcare love it um marketplaces as a as a you know functionality also love it
Jeffery: two qualities of startup needs in order to stand out to you
Sanjeev: founding team and the scalability of idea
Jeffery: Perfect all right we’re going to jump into the personal side book or movie
Jeffery: Superman or Batman
Jeffery: fortune cookie or birthday cake
Sanjeev: Fortune cookie
Jeffery: five minutes with Bezos or Oprah
Jeffery: Mountain or Beach
Jeffery: Bike or run
Jeffery: Big Mac or chicken McNuggets
Sanjeev: A vegetarian pass on both
Jeffery: Fair enough trophy or money
Jeffery: Beer wine cookies
Sanjeev: Um whiskey
Jeffery: Perfect Ted talk or book reading
Sanjeev: Ted talk I need it
Jeffery: Tick Tock or Instagram
Sanjeev: Tick Tock
Jeffery: Facebook or LinkedIn
Sanjeev: LinkedIn I mean I don’t remember when it was the last time I was on Facebook
Jeffery: me neither most famous person that pops in your mind
Sanjeev: There’s so many so it’s hard to say you have to narrow it down which field are we talking about
Jeffery: Anywhere just first name that pops in your mind first person
Sanjeev: Messy I just watched him in the world cup so that’s the first name that comes to my mind as a famous one
Jeffery: Yeah perfect yeah he’s pretty famous he’s doing all right favorite movie and character you would play
Sanjeev: Oh favorite movie and character I would play this is very difficult I have a very bad memory so I you know if you were to ask me what my favorite movie is probably you know the answer changes year over year so I pass very difficult to answer that
Jeffery: All right fair enough favorite book
Sanjeev: Malcolm gladwick gladwell’s Freakonomics
Jeffery: Read it ah it’s a great book I listen to it all 10 of his podcasts and everything yeah he’s awesome great great choice great choice
Sanjeev: Biggest learning for me and my professional career was incentives try Behavior it’s very intuitive you know it’s it’s almost so simple and and straightforward one would say what else did you think but it’s not that easy to internalize at least it wasn’t for me I think that book was very helpful and instrumental in helping me see things in a very different way.
Jeffery: Oh I I agree 100 I love data and reading anything and nothing to do with data especially on that side of it it’s economical data and how they solve problems brilliant absolutely brilliant first brand that pops in your mind
Jeffery: Favorite sports team
Sanjeev: Indian cricket team
Jeffery: Nice all right we’re down to the last two questions what is the meaning of success to you
Sanjeev: Having a lot of fun while doing what you’re doing
Jeffery: Works and what is your superpower
Sanjeev: uh I can do probability as well so I I I I can play poker reasonably okay
Jeffery: I like that it’s a good superpower I think you’re also very engaging so I think that also makes a big difference in the way that uh you work with people so I’ll add in an extra bonus for uh for my uh from my perspective how’s that.
Sanjeev: Thank you very kind of
Jeffery: Well you bet man you bet well I’m gonna say Sanjeev it was uh brilliant getting to dive in and chat to all of these things and I’m sure there was a ton of learning for for startups and for uh investors along I wrote lots of notes uh I guess I’m addicted to the note writing while we talk but um I wanna 100 say thank you very much for all of your time today uh you were fantastic um and the way we like to end our show is that we like to give you the last word anything that you want to share to the investor Community to the startups I turn it over to you but again thank you very much for sharing and being part of this.
Sanjeev: Well thank you very much for having me um and offering me the last word um you know I guess I will I will part with uh sort of two set of thoughts you know first one to uh Founders and segment for investors uh for Founders you know are basically advise them to try things fast fail fast so do not keep on thinking about uh you know building the product uh you know figuring out the pricing business models so on so forth uh for a long time you know go to the market launch ASAP because the market is an incredible teacher and will help you find your product Market fit much better than you know trying to find it on the Whiteboard so just fail fast be be quick to execution and bring something to Market for investors um you know they probably know most of the stuff so uh not really sure if uh if if it will be of uh you know immense value but you know what I typically do is ask three questions when I’m thinking of uh making an investment uh you know the first one almost always is is this a big enough ideas there’s scalability in it is there uh you know a marketer that is not too crowded or is it a new market that can be created with reasonable degree of uh of excitement behind it so you know this is just a big big Market is there a big piece of pie uh that one can go after that’s the first thing I look at second thing I’d love to look at is the quality of the team is this team going to do justice to the idea essentially right are these the right guys with the right skill set and or an understanding of what they’re missing and hence you know the ability to you know Bridge some of those capabilities uh and do they have the personal glitter and determination and the perseverance we were talking about earlier to you know face the adversities that no doubt will be looking at them in their Journey so is this the team that you would back uh and last but not the least is you know is the deal is it a good deal right end of the day yeah a lot of great ideas you know companies going after big visions and and uh you know reaching for the stars going after big uh uh value creation uh thesis with amazing people but the deal is simply not good enough so and at some point you have to say this is a walk away and I will not pay more than that that’s that’s something that I try to do and uh I hope you know it is of uh if you have some sort of refresher for all of you as well thank you
Jeffery: Perfect I love the points man these were great uh great follow-ups thank you very much for that and uh we hope to have you back again but thank you again for sharing.
Sanjeev: Thank you JP peoples my pleasure to be around cheers
Jeffery: Okay that was uh that was awesome Sanjeev shared some great Insight really love how we were able to dive into his background and really explore how that McKenzie side came and that came through and you know just from uh some of the points that we talked about you know preserving value finding what that value is building those relationships so that you can be in and out pitching things and growing with inside the organization you’re working with a customer uh also the answering the question why or why not building Clarity into what you’re doing and how to make things better how to keep pivoting and re-engineering that and what I liked about that when we talked about um you know the first one took uh extra amount of time and the second one they dated 30 faster Etc and the third one it was better and faster than the first one they made that’s exactly how you have to work on your pivots and your changes inside your business and I think you really shared that nicely and it really puts it into context and just to reiterate when you are pitching in your early on company you know like you said it’s tough for those big businesses to shift to be able to take on uh these really smaller opportunities even if they are shattering Ventures really you’ve got to focus on going after the customers that can use your product and get in there move quickly and then go pitch the big people the big 500 or 1000 whatever that number is that you’re going and pitching it’s going to help you move faster and not give away all of your insights and then to his last three things on uh startups you have to think the same way which is you know is the idea big enough is it scalable enough uh do you have the right team or who’s missing from that team that you can kind of go out and get and then are you putting out a good deal I think that makes a big difference and I know he pushed this to the investor but this is also something for the startup to think about so I want to thank everybody for joining us today you have me from Mumbai India having this conversation with Sanjeev in Dubai which is fantastic uh great podcast but if you join this conversation please feel free to share with your friends or subscribe to our YouTube channel follow us on Spotify Apple podcast and our Stitcher feel free to share an audio video clip around our show we may include it in one of our future podcasts find us at marketing at open peoplenetwork.com your support and comments are truly appreciated you can also check us out at supportersfun.com or for startup events visit openpopnetwork.com thank you and have a fantastic day.